Definition
A stale block is a properly formed, valid block that loses the race to become part of the canonical blockchain. This happens when network propagation delays cause two miners to solve a block at nearly the same time. The Bitcoin network resolves this by following the longest chain rule.
Stale blocks represent wasted work for the miner who produced them. The stale rate on the Bitcoin network is typically very low (under 1%) due to fast block propagation. Reducing stale blocks is one motivation behind various network optimization efforts.
In Simple Terms
A valid block not included in the main chain because a competing block was accepted first.
A block that was valid when mined but was ultimately not included in the longest chain. Occurs when two miners find blocks near-simultaneously.